Dollar dips vs yen ahead of FOMC; Rate hike expected by 46% of economists polled by WSJ

The U.S. dollar was lower against the yen and the euro in rangebound Asian trade Wednesday.

The dollar was at ¥120.30 yen from its high of ¥120.47, as the U.S. currency failed to maintain its strength overnight. That compared with ¥120.17 late Wednesday in New York.

The U.S. currency was also lower against the euro, which gained to $1.1286 midday from $1.1269 late Tuesday. EUR/USD was last at 1.1277.

Earlier in the session, the greenback was higher after solid U.S. retail sales figures for August and strong U.S. stock performance, but edged lower in a narrow range despite Asia’s steady stock-market performance.

The benchmark Nikkei Stock Average was up 0.7% midday, while the Shanghai Composite Index  was last trading 0.1% higher.

“Investors find it difficult to make moves now,” said Shinichiro Kadota, vice president of research at Barclays in Tokyo.

“After coming this far closer to the FOMC, stock-market performance will unlikely give the direction” to the dollar, said Kadota. 

Later in the day, market players will monitor U.S. inflation data for August, as it may provide additional cues whether the central bank will raise interest rates for the first time in nearly a decade at its policy meeting Thursday.

However, Kadota said he believes the dollar will not fluctuate excessively before the FOMC outcome.

About 46% of economists polled last week by The Wall Street Journal predict the Fed would raise rates at its Sept. 16-17 meeting. In early August, 82% of economists believe the Fed would act in September.

In other currency-pair trades, the euro was at ¥135.55.